This is why US farmers are closely monitoring Ukrainian conflict

While the conflict in Ukraine continues to unfold, farmers across the United States have taken a strong interest in the situation since regional instability could have various consequences on wheat and corn supplies around the world.

According to McClatchy DC, the upheaval in Ukraine has many
farmers and food producers bracing for possible disruptions in
the country’s supply chain and ability to receive loans for
planting. Meanwhile, any potential Western sanctions on Russia’s
own wheat output could also have repercussions felt on American
farms and elsewhere.

“This is a region where we have been facing stiff competition
from Ukraine,” Thomas Sleight, the president and CEO of the
U.S. Grains Council, said to the news service. “Longer term,
everyone is waiting to see what effect credit availability will
have on Ukrainian farmers’ willingness to plant and continue
expanding their acreage of wheat and corn.”

Currently, Ukraine is the world’s third-largest corn exporter and
the sixth-largest wheat exporter. Russian is the fifth-largest
wheat exporter, and imports a significant amount of US corn and
poultry products.

Ukraine’s rise in corn and wheat production – as well as Brazil’s
– has coincided with a decline in growth in the United States,
leading many to think it would become one of the US’ chief
competitors. Previously, analysts predicted corn acreage in the
US would continue to fall, but Ukraine’s recent instability may
cause farmers to rethink that outcome and plant more corn.

If the ongoing conflict continues or escalates, it could result
in higher grain and corn prices across the globe. As noted by the
Wall Street Journal earlier this week, wheat prices rose three
percent to their highest level in two weeks on Monday, and have
risen 12 percent since the start of 2014.

"The rising tensions have people concerned about their
ability to sell into the world market, and that the U.S. may get
some of that business," said Brian Hoops, the president of
brokerage Midwest Market Solutions to the Journal. "Ukraine
farmers are also struggling with the ability to secure input
financing to plant another wheat crop."

Complicating the situation is the fact that a lack of rain across
the American Great Plains region, which has seen only small
rainfall in the last six months, also restricts future wheat
growth.

Since both the Russian ruble and Ukrainian hyrvnia have declined
against the US dollar – 10 percent and 35 percent, respectively –
there’s also concern that not only will US products become too
expensive to import, but also that farmers in those countries
will sit on their own crops until their currency rises again. If
that’s the case, it could mean restricted global supplies and
even higher prices.

So far, however, USA Poultry & Egg Export Council spokesman
Toby Moore said there’s no indication that is what’s happening –
an important sigh considering Russia is the US’ second-largest
importer of poultry.

“As far as our members are concerned, it’s pretty much been
business as usual, no threats. They’re importing product,”
he told McClatchy. “The bigger concern is the decline in the
value of the ruble, which makes our products more expensive in
Russia. But so far, so good.”